The impact of rising auto insurance premiums has prompted U.S. drivers to seek usage-based coverage and consent to monitor their driving, according to the J.D. Weiss Quarterly Loyalty Indicators and Shopping Trends Report for Q4 2021 on U.S. auto insurance.
Due to higher premiums despite driving less, U.S. consumers are changing insurers more often.
Auto risk programs can help lower their rates.
In 2021, higher-risk consumers were more likely to shop around for insurance actively than their lower-risk counterparts - that wasn't the case in 2020.
During the pandemic, lockdown measures led consumers to drive less, revealing the inflexibility of traditional coverage, which doesn't tend to adapt its premiums to changing habits.
More policyholders now seek coverage that considers their habits. It customizes mileage-based policies by analyzing auto usage and behavioral data to offer lower premiums.
Data comes from mileage reporting and telematic driver scoring from mobile apps, diagnostic port plug-in devices, Bluetooth beacons, and built-in options like OnStar.
The telematics data of large U.S. insurers like Allstate is used to introduce mechanisms that reward and promote less risky behavior-such as cashback on each trip-through structured behavioral change.:
49% of consumers participated in telematics programs in 2021, according to a survey by TransUnion and J.D. Power.
On select global markets, 69% of insurance customers are now willing to share driving data with insurers for lower prices, compared with 50% in 2019.
U.S. drivers are expected to buy UBI coverage by 2023 for 52.5 million more than they do now.
In other words, J.D. Power found that price-conscious customers are aware of and switch to personalized value programs. Auto insurance in the United States is going telematics.
That'll probably put more pressure on midsize insurers who have been using telematics at a third the rate of their larger counterparts.
Insurers can see their premium revenues drop because of policyholders' use of telematics and IoT. It may be harder for those whose tech stacks are still in progress to benefit from telematics features.